Dow on track to hit 20,000 in next few years?
Penn Financial Group president weighs in
- Duration 4:38
- Date Mar 7, 2013
Penn Financial Group president weighs in
Also in this playlist...
This transcript is automatically generated
Right now let's -- -- on the stock market see how your money is trading today and we had another record setting day for the Dow and right ankle -- the Dow is moving higher again today headed the jobs report just mention that we're gonna get tomorrow.
This is so respected minds on Wall Street are predicting -- -- good hit.
In the next few years -- calls the president at Penn financial group -- it's crazy talk 20000 on the Dow.
The next couple of years I think it's a little effect little -- yet I think eventually yes we have had 20000 we're gonna probably 40000 eventually but the -- 120000 in your future.
-- get a little bit ahead of yourself.
So this is the reason why one analyst says this is Thomas -- no relation by the way he works and for JPMorgan Chase.
He basically says that companies are doing so good that earnings are gonna -- accelerate this year over the next four years they're gonna see substantial increases and that's -- the companies are -- Drive the stock market higher I agree partially with what he says earnings this year expected to be the best ever so I do agree with that.
And based on valuations -- well I -- the best ever because -- -- cutting the fat over the last couple of years when you go through recession like we did he gives companies the ability to fire people and not take a backlash so by firing people -- overhead is dropped.
There -- revenues that increasing at the same pace that it should be.
But the bottom line -- the net -- to the bringing in is increasing every year.
Eventually need more demand for your goods and services with unemployment words that that's why don't see earnings increasing every year going forward okay let's talk a little bit.
The Dow is -- minor sounds when it dies thirty big companies big stocks in the market.
I couple names that you might know what McDonald's Wal-Mart Home Depot American Express -- cover all sorts of different sectors but is still only thirty companies so.
-- street -- when we look at the Dow hitting the high records did it actually reflect what's going on in the economy or the district spokesman that's going on in the -- You know this is the S&P 500 is another in excess of 500 largest companies United States that ever present economy a bit better but the Dow's been around for so long it's -- Bellwether we all watched.
But it does give a great insight because as you mentioned you have McDonald -- IB -- of Wal-Mart that's a lot of places people are spending money so.
It does represented but what people have to remember is if you look at just economy so people think.
It's not that good unemployment tie in the meantime -- sitting on the sidelines thing -- -- market and our hitting all time high so there is a disconnect between.
Do you think the average investor that might have been sitting on the sidelines is this a good time to reenter the market thinking about maybe that's -- -- thousand number in the next couple years I'll tell you this this is very -- preachers have done in the twenty minutes a big hit spots that three people -- -- for a one case so it's healthy people who -- -- get back in with -- but that's -- -- and everybody let's get back in the market.
It's usually too late.
But I do think there's probably another year or two left in this rally that you can get in now it's a little crazy to -- in the last couple years because you know the Dow hit my 6500 something like that I see it at 141000 and we we're told this is a new normal.
-- not gonna get as much from your stocks unemployment is going to remain high we're gonna have all these new problems -- all problems that are gonna remain.
So what happens that new -- law is in is this -- the -- normal on it is high unemployment that's.
-- stock market.
Well you know when it comes that people like me and Wall Street we're kinda like economists and meteorologist potentially what happened after it happened you know right now -- -- -- things are great you know earnings are good.
Instead of looking ahead.
You know I think it.
We have to realize unemployment not to get back kind of 5% levels -- probably not going to be that 5% level anytime soon.
But I think people are OK with that they've they've come to realize that we can still grow the economy at the GPs at 2% and earnings and still grow at a nice clip and companies can make.
Money so is that an indication and that we we don't need to cut our debt -- only need to worry about our deficit and we don't really care of 33 million Americans are you know unemployed -- -- sort of not employed.
Is that it is is an indication that that's what we can live with and still make money in the past or not.
And that's why don't agree with the original and those you mentioned 20000 because that to get to 20000 things things have -- had -- the perfect for the most part.
I think things are good enough now -- the Federal Reserve keeping interest rates low but eventually we have inflation eventually interest rates go up and when that happens a stock -- -- -- go up with it.
So no we need to get our house in order as far as the US economy is concerned.
But we can keep flying on under the coattails of the Fed for a little while.
You warrior -- DC today expect kinda felt that that was an indication as well that things are gonna go okay right right -- -- -- -- Syrian -- -- -- new color I was.
Was able to match these that's what put on the other I -- some embarrassed that it.
-- yellow socks.
And I felt like I had very hit that theme mindset that our -- -- keep an -- and a market 20000 maybe not -- thin but could this have been interesting to talk about maddening thing he's there to keep John.